Bank Charges Test Case Article discussion

McKneff

Could anyone answer me this.

A couple of years ago a member of my family was in a very bad financial state
being charged on charges, getting deeper and deeper into debt. The bank and other people were hounding her day after day.
It caused the breakup of the relationship and nearly ended up her having a breakdown. At the time she confided in me and the only thing i could suggest
was that they sold the house and started from scratch. They did this and ended up with a small equity which they split with each other. During the course of this she applied to have charges refunded. I did not know anything about the hardship rules at that time and of course would have advised her about this if i had. Did the bank not have the responsibilit that she could have gone down this route. and can she have any complaint about this in the light of what has happened today. I think it was to the tune of about £5k.
Thanks, any help would be appreciated.

almost_there

katiefly wrote: »

I am speechless... this is so wrong, and the UK government is useless considering they are the major shareholders of several big banks.

I honestly think that if the Goverment didn't have such a big stake in the Banks the result might have gone the other way.

MrLeeLee

Twinkly wrote: »

The banks somehow managed to con some customers into thinking other customers were stealing from them so that nobody would notice who really WAS stealing - from ALL of them. Oh and actually - still are and will be for decades.

The release of the £2.50 each time you use a cash machine 'story' (although I think full on threat is a more accurate term to use) was nothing short of sickening from the banks.

We should expect nothing less from them though. Horrible horrible people.

donyoung

as above , todays result was not what we wanted and no1 expected but rather than pay us out millions, pay some person a percentage of those millions and the result goes the other way ???

these are my views and i think there will be at least 1 person better off with the result i.e backhander:T

its a joke and a total fix and ill tell any1 that !!!


if gordon brown wasnt useless we could all snd him a letter to do somthing about it or even the queen if she was for somthing rather than stamps and to bring in tourists

McKneff

It surprises me how may people where so confident we were going to win.
There are countless posts on the boards where people were not even contemplating not getting their charges back.

There have even been people taking out loans on the strength of winnign, now how stupid was that.

SAIBOT

donyoung wrote: »

as above , todays result was not what we wanted and no1 expected

Speak for yourself.

BR54

BRITAIN'S werewolves today won the right to tear your head off, rip open your chest and hungrily devour your still-beating heart.
In a surprise move the Supreme Court ruled that the werewolves' relentless, blood thirsty carnage was within the law and should not be investigated by the Office of Fair Trading.

Supreme Court president Lord Phillips said: "While public opinion may be divided on the fairness or otherwise of horrifically violent werewolf attacks, the law states that having one's innards feasted upon is part of the price of going for a walk on the moors.

"Under the terms and conditions, accepted by moor walkers, werewolves will sink their razor sharp teeth into your throat and then pause momentarily to howl with glee at the mouth-watering prospect of fresh meat."

But Lord Phillips said the ruling was not the end of the matter as the OFT could still scrutinise werewolf attacks under other parts of the Being Eaten Alive By a Lycanthrope Act (1976).

An OFT spokesman said: "We have never suggested that werewolf attacks are unfair in principal. We simply believe they should limit themselves to taking a chunk out of your thigh or having one of your feet in a sesame bap."

A spokesman for the British Werewolves Association welcomed the decision, adding: "We have always maintained that those who stray onto the moors, even accidentally at the end of the month, should be devoured in an unstoppable orgy of teeth and claws.

"Nevertheless, we will do everything we can to help vulnerable people stay off the moors by putting up lots of useful signs that say 'shortcut across the moors this way' and 'road ahead closed'."

orc_2

From OFT web site, not sure if posted elsewhere. If so, apologies.


http://oft.gov.uk/shared_oft/personal-current-accounts/QandAs.pdf

Questions and answers for OFT's personal current account work

Updated 25 November 2009

Investigation and Test Case Update

1. What was the outcome of the banks' appeal to the House of Lords
(now the Supreme Court)?
The Supreme Court has allowed the banks’ appeal. The judgment
overturns previous High Court and Court of Appeal rulings that
unarranged overdraft charging terms are assessable in full for fairness.

2. What did the Court Order?

That the bank charges levied on personal current account customers in
respect of unarranged overdrafts (including unpaid item charges and
other related charges) constitute part of the price or remuneration for
the banking services provided and, in so far as the terms giving rise to
the charges are in plain intelligible language, no assessment under the
Unfair Terms in Consumer Contracts Regulations 1999 of the fairness
of those terms may relate to their adequacy as against the services
supplied.

3. What does this ruling mean for the OFT’s investigation of fairness?

The OFT will now consider the detail of this judgment before it makes
a decision on whether or not to continue its investigation into
unarranged overdraft charging terms. We expect to make a further
announcement in December.

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4. What will happen to customers’ complaints?

Consumers can still complain to their banks. If they are unsatisfied
with the response, they can take their complaint to the Financial
Ombudsman Service.
For further information, please see the Financial Services Authority's
(FSA) website: www.moneymadeclear.fsa.gov.uk

5. Why was the test case brought?

In March 2007, following an initial review, the OFT announced an
investigation into the fairness of unarranged overdraft charging terms.
In July 2007 the OFT, seven banks and one building society1 agreed
to a 'test case' to resolve the relevant legal issues, to enable an
orderly and efficient process for dealing with the large number of
consumer complaints about the charges.
Over a million complaints about the charges have been received by
banks, the county courts and the Financial Ombudsman Service.

6. What was the banks’ appeal about?

The appeal was about the extent to which the OFT is entitled to
assess the banks unarranged overdraft charging terms for fairness.
The Court was not asked to consider whether the terms were unfair or
not.

7. Why did this appeal go all the way to the House of Lords?

The High Court and the Court of Appeal found in the OFT’s favour
that the OFT was entitled to fully assess the banks' unarranged

1 Abbey National plc, Barclays Bank plc, Clydesdale Bank plc, HBOS plc, HSBC Bank plc,
Lloyds TSB Bank plc, Nationwide Building Society, and the Royal Bank of Scotland Group
plc.
This selection of banks covers an estimated 90 per cent of the personal current account
market.
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overdraft charging terms for fairness. The Court of Appeal refused the
banks’ request for permission to appeal to the House of Lords.
However, the banks successfully petitioned the House of Lords
directly for permission to appeal and the House of Lords heard the
appeal on 23 – 25 June 2009.

8. Why did the Supreme Court give the judgment when the House of
Lords heard the appeal?

The hearing took place before the House of Lords on 23 – 25 June
2009. The House of Lords was replaced by the Supreme Court from 1
October 2009. Under transitional provisions, appeals that were heard
before the House of Lords passed to the Supreme Court.

9. Where can I access the court documents?

Copies of the Supreme Court judgment and the Court’s Press
Summary of the judgment are available on the Supreme Court
website:

https://www.supremecourt.gov.uk/news/judgments.html
https://www.supremecourt.gov.uk/decided-cases/index.html.
Broadly speaking, the Civil Procedure Rules (CPRs) say that some
documents - like particulars of claims - should be freely available
publicly. They would usually be freely available from the court, but the
OFT will seek to make them available on our website. The CPRs also
say that the availability of other documents - such as the witness
evidence and the skeleton arguments - is more restricted, and they are
only available on specific application to the court.
To obtain a quote for copies of transcripts of court hearings, please
contact the Case Management Department at Merrill Legal Solutions
on (020) 7421 4010.

Page 4 of 7

Copies of the documents can be found here at:

https://www.oft.gov.uk/advice_and_resources/resource_base/marketstudies/
completed/personal/personal-test-case/personal-documents

10. What are the roles of the OFT, FSA and FOS in all of this?

The OFT's role is to make markets work well for consumers. Its
responsibilities include enforcement of the UTCCR, where appropriate.
The OFT does not have the power to intervene in individual disputes
between consumers and businesses, rather, it is the OFT's duty to
consider any complaint that a consumer contract term is unfair and, if
appropriate, apply for an injunction from the court to prevent the
continued use of that, or a similar, term.
The Financial Services Authority (FSA) regulates the financial services
industry and in particular deals with how banks handle complaints.
Like the OFT, it does not handle individual complaints but it does have
an interest in ensuring that complaints about past actions are
satisfactorily dealt with. The FSA is a Qualifying Body under the
UTCCR, meaning it too has the power to enforce them, where
appropriate.
The Financial Ombudsman Service (FOS) has responsibility for dealing
with individual complaints by customers.
While all three organisations hold different roles, we have been
working together to ensure that this process is well coordinated.

Overview of the OFT’s work relating to personal current accounts

11. What other work is the OFT doing in relation to personal current
accounts?

Personal current accounts are a vital gateway to effective participation
in the economy. Since April 2007, following an initial review, the OFT
has been looking at how well the market as a whole serves

Page 5 of 7

consumers, as well as the specific issue of the legality of unarranged
overdraft charges.

12. What did the OFT’s market study find?

In July 2008, the OFT published a market study into the state of the
personal current account market. It established a complete picture of
the market. It found that personal current accounts in the UK have
many positive features:
• high levels of customer satisfaction
• many day-to-day services don't incur a charge, and
• internet and telephone banking makes it easier to manage.
However it identified a number of concerns which the OFT believed
needed addressing:
• low levels of transparency over unarranged overdraft charges and
costs, coupled with a high proportion of banks' total revenues
made on unarranged overdraft charges and costs
• the complexity of the charges makes it harder for consumers to
control the costs they incur and some pay significant amounts (a
significant group of consumers underestimate the level and
frequency of banks' charges, and 1.4 million consumers paid over
£500 in charges), and
• a general perception among consumers, not completely unfounded,
that switching is complex and risky, contributing to low levels of
switching between banks.

13. Where can I find a copy of the market study?

The study can be found, together with an executive summary and
follow up report, on the OFT website at www.oft.gov.uk/pca.
The OFT’s separate investigation under the UTCCR sits alongside the
market study.

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14. What work has been done in relation to the concerns identified in the
market study?

On 7 October 2009, the OFT announced that banks had agreed to
make personal current account costs more transparent and the
switching process more reliable and trusted.
To improve transparency, so that consumers can more easily
understand the costs of their accounts and compare with others,
banks will:

• introduce an annual summary of the cost of their account for each
customer, which will help them to focus on the value they are
getting in a similar way to annual car or house insurance renewal
quotes

• make charges prominent on monthly statements, so that
consumers are more aware of the charges they pay

• provide average credit and debit balances, which will help
consumers to estimate the potential benefits of switching bank,
and

• produce illustrative scenarios showing unarranged overdraft
charges, giving consumers an idea of the costs for different
patterns of use.
The OFT is also taking steps to help consumers understand and
compare the costs of their accounts through new advice and tools,
including an interest calculator, on its Consumer Direct website.
To improve the switching process, the following have either been
introduced or are being introduced following work with Bacs, the
payment processor:

• steps to reduce problems that arise from transferring Direct Debits

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• measures to reduce the impact on consumers of any problems with
transferring Direct Debits, and

• a new consumer guide and website as part of efforts to increase
consumer awareness of the automatic switching process.
The OFT continues to have concerns about unarranged overdraft
charges. The OFT will therefore be seeking discussions with banks,
consumer organisations, the FSA and the Government in light of the
Supreme Court judgment.

15. How does the OFT's work on personal current accounts affect
consumers in Northern Ireland and Scotland?

The OFT expects its work to be relevant for consumers right across
the UK. The market study covered the whole of the UK and the main
UK banks. The OFT has not specifically focused on NI due to the
Competition Commission report.2 The UTCCR apply across the UK.

2 This report found that consumers were not actively searching or switching in the NI

personal current account market.

Twinkly

The OFT should do a comprehensive study of how we can avoid using banks altogether where possible if we choose to do so.

That Needing a bank account for benefits, paying bills and wages has slowly been forced upon us and given the banks a clear monopoly on our finances should be investigated and reformed.

Irrespective of the charges issue consumers are often given little or absolutely no choice but to have a bank account. Whether it is easier or not to have a bank account is also irrelevant and I for one would like more choice in how I run my own financial affairs.

Rich66

What annoys me is that the banks seem to make out that you were actually going overdrawn to get the charges, i didn't, because they didn't honor DD's and charged £35 a time for the pleasure. At least this charge is now down to £5 at my bank.